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Neglect Card Payment Reconciliation at Your Peril


adjustments, are in fact received in the bank accounts. Although such reconciliation is one of the most essen- tial tasks that any business accepting card payments should perform, it is too often simply neglected.

C Businesses have cashiers and staff members count cash daily

and then double check, plus implementing various processes, to ensure that not a single penny is missing. However, too often the same businesses do not have consistent (or any) reconciliation processes in place for card payments.At the end, it is money just asmuch as cash. In fact, card payment reconciliation should be a much easier

process once implemented than cash reconciliation, because it is a muchmore automated process and staffmembers can have access to reporting solutions and tools fromvarious providers involved in the card processing flow. One basic reason for not having proper card payment recon-

ciliation processes may be that processing and bank deposits are automated. Staff might not fully understand how card processing works, and too often card payment reconciliation is looked at as a very frustrat- ing task that cannot be fig- ured out. Payments associated

with card payments seem to be deposited regularly in the bank account, so people do not pay attention to what is actually happening and simply operate on the assumption that all is accu- rate. Only to find out one day that significant amounts are missing.At that point, it is often too late to act and the only possible outcome is for the business to accept a loss. There is no magic with reconciliation. It needs to be com-

pleted so that accurate receipt of all payments can be validated. Remember, the ultimate goal of reconciliation is to identify dis- crepancies, should there be any, so proper actions can be prompt- ly taken. Following are a few essential items to consider for card pay-

ment reconciliation:

Teamwork Work as a team within different company departments

involved (operations, finance, IT, etc.) andwork hand-in-handwith all vendors involved in card process (payment application suppli-


ers, third-party providers, processors, banks, etc.).Ask vendors which reports and tools they have available that can be incorporat- ed into the reconciliation process.

Understand the processes Make sure the card payment processes and reconciliation

Businesses do not have consistent (or any) reconciliation processes in place for card payments. At the end, it is money just as much as cash.

processes are fully understood. If one does not understand the transaction processing flow, how card processing works and what needs to be accomplished, chances are that the reconciliation process is not correct. Make sure your current reconciliation process is accurate. Do not assume that what may be in place is accurate. It may need to be updated.

Bank deposits Bank deposits are not

instantaneous. There are several days between pay- ments completed on the payment applications and the bank deposits. In addi- tion, depending on the country and the card type,

the number of days can vary. In other words, not all payments for one daywill get deposited into your bank account on the same day.

Processing fees In most cases, processing fees by the processors are with-

drawn ahead of the bank deposits. Account for the fact that the amounts deposited into your bank account will not be exactly the amounts accepted on-site, but are the amounts acceptedminus the processing fees.

Create a ‘reconciliation table’ Individual reports from different systems and vendors should

not be reviewed individuallywhen comparing data.All data should be centralized into a single reconciliation table so that data from the different reports can be analyzed side by side.Abasic reconcil-

ARD PAYMENT RECONCILIATION is the process throughwhich one ensures that all card payments (transactions) accepted at point-of-sales systems or payment applications, plus subsequent

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